I attended a ceremony to celebrate the completion of a new production line at the Tsukuba Innovation Arena (TIA) Power Electronics Research Center. The production line, which enables mass production of silicon carbide (SiC) power semiconductor devices, has been collaboratively constructed by the National Institute of Advanced Industrial Science and Technology (AIST) and our company since last November.

To step further from basic research, we will develop technologies for mass production, reliability evaluation, and quality assessment of the world's most advanced and fastest SiC power semiconductors. This is the world's first open innovation base that achieved a manufacturing process of large 6-inch-diameter wafers.

I have always focused on SiC technology, which can help reduce energy loss, contribute to energy conservation, and lessen environmental loads, and together with superconducting technology, I place it at an extremely important position in our development and business strategies.

Since my time as an auditor at AIST, I also have felt that building a mutually complementary relationship with other companies is effective. I hope that the completion of this new production line becomes a critical milestone in the transition toward practical and widespread use of SiC power semiconductors by conducting meticulous research and development through close collaboration and cooperation.

On November 1, we announced to the public our business results for the first half of FY 2016.

In the first half, we enjoyed stable demand in the fields of automotive wiring harnesses, optical fibers, and optical and electronic devises, especially overseas. However, affected considerably by shrinking demand in FPCs for mobile devices, rapid progress in the yen's appreciation and drop in the copper price, we marked a decline in each of net sales, operating income, and ordinary income from the same period a year earlier. On the other hand, profit attributable to owners of the parent increased from the corresponding period of a year earlier. This rise was due to a decrease in income taxes because the deferred tax assets of a subsidiary succeeding in a business recovery were included in our consolidated business results.

Of the total decline in net sales from the same period the year before, approximately 160 billion yen was due to drop in the copper price and yen's appreciation, which also caused a drop in operating income by approximately 15 billion. Without these factors, we could have marked increases in both net sales and operating income.

Regarding our full-year business results for FY 2016, we revised downward the forecasts we announced at the beginning of the fiscal year as follows: net sales of 2.8 trillion yen; operating income of 125 billion yen; ordinary income of 150 billion yen; and profit attributable to owners of the parent of 85 billion yen. Although our business performance in most non-FPC fields, such as automobiles and information & communications, were favorable, we were greatly affected by the decrease in sales and income due to the yen's appreciation, drop in the copper price, and shrinking demand for FPCs.

As we announced at the beginning of the fiscal year, our plan is to pay an annual dividend for FY 2016 of 35 yen per share, the same as in the corresponding period the year before, including an interim dividend of 18 yen per share.

Although it is highly likely that the current uncertainty will continue in the second half of the fiscal year, I will ensure that all of our staff work hard to fully reinforce SEQCDD*, an essential element for manufacturers, and make it robust enough to withstand changes in the external environment.

* Safety, Environment, Quality, Cost, Delivery, and Research & Development

On Sunday, October 30, I attended the 6th Osaka Marathon as chairman of the organizing committee, a position I have served in since the second event. Although the previous day was very windy, race day opened to fine, clear autumn weather, a perfect day for a marathon. At 8:55 a.m. the wheelchair marathon started from the front of Osaka Castle Park, and then at 9:00 a.m. the short course race and full marathon started. Approximately 32,000 athletes began running out into the city of Osaka.

After seeing all of them off at the starting point, I went on ahead to the finish line to welcome them. The first finisher was Mr. Takahiro Ito in the wheelchair marathon with a record of about 1 hour 35 minutes. For the men's full marathon, Mr. Ngandu Benjamin of Kenya became the meet champion for the first time, and for the women, Ms. Yoshiko Sakamoto won her first victory. As seen by Japanese athletes sweeping the podium in the women's race, as well as Japanese runners taking second and third place in the men's race, Japanese racers' excellent showing stood out at this event.

I hear that this year's marathon drew approximately 4,000 runners from abroad, a record high exceeding last year's figure, indicating that the event is becoming more international year by year. Actually, Mr. McDuffee, from one of our group companies in the U.S., won a lottery to gain entry and finished the race successfully.

The Osaka Marathon is supported by many people such as the runners themselves, along with approximately 10,000 volunteers and event-related staff, and more than 1.3 million supporters cheering on the runners along the course. This gives me the feeling that the Osaka Marathon has now become a signature event of Osaka in autumn. As for the charity program, a major characteristic of the meet, over 130 million yen had already been donated even before the event this year. In terms of the charity event, the meet is growing, and I hope that the Osaka Marathon becomes the top runner in social contributions.

I would like to take this opportunity to express my gratitude for all of your support for all of these things.

On October 16, we held the Sumitomo Athletics Festa at the Sumitomo Multi-Purpose Sports Field in Itami, Hyogo. The event mainly consisted of an athletics workshop for elementary and junior high school students in the morning, and the Sumitomo Electric Cup, which also served as a meet to challenge Japanese records, in the afternoon. In addition, the event adopted the theme "health festa" for the first time, and contained physical fitness tests and a yoga workshop. Although the wind was a little strong, the weather was nice, helping to attract many more visitors than usual.

Moreover, some Olympians participated in the event, such as Yoshihide Kiryu, Yuzo Kanemaru, Julian Walsh, Suguru Osako, Anna Doi, Kayoko Fukushi, and Tomoya Tamura, who is a member of our athletics club. These Olympians were so appealing that a crowd of people who wanted to catch even a glimpse of them formed around them in an autograph session.

For new records, Hideki Omuro of Otsuka Pharmaceutical equaled the Japanese record in the 200 m hurdles. Also, Hyuga Endo of Ishikawa High School, whom we have decided to employ, broke the Japanese high school student record that he had set in the 3,000 m. Furthermore, Yuki Takeshita of Sumitomo Electric won victories in the 60 m and 100 m, beating the meet record and his own record in the latter event. Thus, the festa greatly wowed the spectators. Watching the athletes sprinting in front of me, I cheered for them loudly despite myself and thoroughly enjoyed a fine autumn day of sports.

Mr. Endo running after Mr. Takada of Sumitomo Electric

Presenting medals to the winning team of a relay between elementary schools

I would like to conclude by expressing my sincere appreciation to the Kansai Industrial Track and Field Association and other parties involved in this event, Itami City, the Board of Education of Itami City, companies that cooperated with the event, athletes who competed or participated in the meet and their coaches, and Sumitomo Electric employees who helped behind the scenes.

Recently, I attended a conference for all top executives of our group companies in the Americas. Held in Silicon Valley, it was a two-day event consisting of a dinner party on October 5 for participants in the executive conference and the main session on the following day, October 6.

Containing a wide variety of activities, such as exchanges of opinions on the current situations of group companies and the common challenges they face, reports of each committee's activities, suggestions, discussions, and guidance, the conference is improving each time in terms of its range of themes and quality. This event has made me realize that each group company is increasing its commitment to its local region, leading to the acceleration of localization. The common language used at the conference was English, and the Japanese expats showed a spectacular improvement in their English proficiency. Although I might be too optimistic, I feel that globalization and diversity are finally becoming a part of our corporate culture.

Whenever I see our employees putting in an excellent performance outside Japan, I make a lot of pleasant discoveries. On the other hand, in Japan, which lags behind, I keenly feel the necessity to further promote globalization and diversity.

The venue of the conference was San Jose, renowned for Silicon Valley, near San Francisco in California. Staff members of our group company in Silicon Valley drew up the necessary documents, arranged the venue, prepared an exciting party, arranged the accommodations for the participants, and did all the other necessary things. I would like to express my appreciation for their careful preparations and consideration with due care to even the minor details.

Since I serve as chairman of the Osaka Marathon Organizing Committee, on my way home from this U.S. business trip I also participated in an event held on October 9 to celebrate the eve of the Chicago Marathon, and enjoyed renewing my friendship with the Chicago Marathon Executive Race Director, Carey Pinkowski. Chicago and Osaka are sister cities, while the Chicago Marathon and the Osaka Marathon have also concluded a partnership agreement. Although both Director Pinkowski and I are busy, we meet at least once a year, contributing to grassroots-level diplomacy on behalf of the two cities. Executives at our group company in Chicago arranged for my annual stay in the city, and I would like to express my gratitude to them.

Born in 1944 in Hyogo Prefecture, Masayoshi Matsumoto joined Sumitomo Electric in 1967. After serving as General Manager of Chubu District Office, Managing Director and Senior Managing Director, he assumed office of President and CEO in June 2004.

His leisure activities include jogging, reading and art appreciation. Also a seasoned athlete, he played baseball in junior high school and practiced judo in senior high school. In university, he threw the javelin competitively and participated in all-Japan inter-university competitions.